Gold & Silver Daily

Ed's Critical Reads

May 22, 2015

Economic Hope Crashes By Most Since 2013 Government Shutdown

Consumer Comfort is now the lowest it has been since Dec 2014 as Bloomberg's sentiment index continues to track the pain of higher gas prices better than the gain of higher stock prices. This is the biggest 6-week plunge in sentiment since Oct 2013. What is more worrisome is 'hope' is plunging. Economic Expectations fell by the most since Oct 2013 - the government shutdown - having fallen for 3 straight months. It appears the trickle-down popularity of seeing a Green Dow print every night on the news does not make the average Joe feel any better about the world after all???

This 2-chart Zero Hedge piece from 10:07 a.m. EDT on Thursday morning is worth thirty seconds of your time---and I thank Dan Lazicki for today's first story.

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2015's Lowest Volume, VIX Crush, and Data Dump Send Stocks to Record Highs


In the last 12 hours  - China PMI Miss/Drop, Japan All Activity Index Miss/Drop, France Services PMI Miss, German Manufacturing & Services PMI Miss/Drop, Eurozone Composite PMI Miss/Drop, Chicago Fed National Activity Index Miss/Drop, Initial Jobless Claims Miss/Drop, U.S. Manufacturing PMI Miss/Drop, Bloomberg Consumer Comfort Plunge, Philly Fed Miss/Drop, E.U. Consumer Confidence Miss/Drop, Existing Home Sales Miss/Drop, Kansas City Fed Collapsed... and Stocks Surge...

This Zero Hedge piece appeared on their website about thirty-five minutes after the markets closed yesterday---and if you're a chart junkie, this story is for you.   It's the second offering in a row from reader Dan Lazicki.

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Stocks and bonds are about to crash: David Stockman

David Stockman explains why the stock and bond market could be on the verge of a collapse.

This 3:33 minute CNBC video clip was posted on their website about noon on Thursday---and it's the third contribution in a row from Dan L.

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Rising Bank Repossessions Push Up Foreclosure Activity in April

A surge in bank repossessions of properties last month pushed overall foreclosure activity across the United States to an 18-month high, according to a report by industry firm RealtyTrac released on Thursday.

Overall, 125,875 homes across the country were at some point in the foreclosure process in April, a 3 percent jump from March. The increase drove foreclosure activity up 9 percent from year-ago levels, RealtyTrac said.

April's jump in foreclosure activity, which includes foreclosure notices, scheduled auctions and bank repossessions was mainly driven by a 25 percent rise in repossessions.

A total of 45,168 homes were reclaimed by banks in April, up 50 percent from a year ago, bringing bank repossessions to their highest levels in 27 months.

This news item was posted on the Internet site at 10:23 a.m. EDT on Thursday morning--and I thank West Virginia reader Elliot Simon for sending it along.

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Once-Unthinkable Criminal Pleas by U.S. Banks Get Investor ‘Meh’

Investors yawned at the news Wednesday that five of the world’s biggest banks, including JPMorgan Chase & Co. and Citigroup Inc., agreed to plead guilty in a currency-rigging probe. They’re among six banks that will pay $5.8 billion in fines.

Barely more than a year ago, criminal charges against major U.S. banks were considered unthinkable, with lawyers and analysts viewing felony convictions as a death sentence and a threat to the financial system. Now, by granting waivers allowing lenders to keep operating even after a felony plea, the government has managed to punish firms while protecting them from fatal consequences.

This is the first time you had Citigroup, JPMorgan or any U.S. bank plead guilty essentially to criminal conduct -- this is a bad day for American finance,” Mike Mayo, an analyst at CLSA Ltd., said in a televised interview with Bloomberg. “Having said that, this is more backward-looking than forward-looking.”

Like I said yesterday, dear reader, until the guys in the corner suites and the boardrooms are looking at large numbers of years in orange jump suits at the Crowbar Hilton, nothing will change.  These are just licensing fees---felony convictions or not.  This news item appeared on the Bloomberg Internet site at 3:30 p.m. Denver time Thursday afternoon---and it's the second offering in a row from Elliot Simon.

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JPMorgan’s Jamie Dimon Deals With His Bank’s Felony Charge – Badly

After more than 200 years of operation, yesterday JPMorgan Chase became an admitted felon. That action for foreign currency rigging came less than two years after the bank was charged with two felony counts and given a deferred prosecution agreement for aiding and abetting Bernie Madoff in the largest Ponzi fraud in history. The felony counts came amid three years of non-stop charges against JPMorgan Chase for unthinkable frauds: from rigging electric markets to ripping off veterans to charging credit card customers for fictitious credit monitoring and manipulating the Libor interest rate benchmark.

Against this backdrop of a serial crime spree on the part of employees on multiple continents and coast to coast in the United States, JPMorgan released a statement yesterday regarding the bank pleading guilty to a felony charge for engaging in the rigging of foreign currency trading, calling it “principally attributable to a single trader.” In the statement, Dimon says the bank has a “historically strong culture.”

Dimon is, if nothing else, a master of the grand illusion.

This short essay put in an appearance on the Internet site yesterday sometime---and I thank Richard O'Mara for bringing it to our attention.

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"We Reached The Tipping Point": Income Inequality is Highest Since Records Began

While soaring stock prices do nothing to boost the economy, because as 7 years of hard facts have shown, the only thing "trickle down" QE has done is forced economists to jump the shark and demand not one but two seasonal adjustments to goal seek collapsing economic data, the S&P hitting new all time highs on a daily basis has certainly succeeded in one thing: pushing inequality around the globe, and especially in the US, to new record highs.

And earlier today the latest OECD report confirmed just that, when it reported that gap between the rich and poor in most of the world's advanced economies is at record levels.

In most of the 34 countries in the Organisation for Economic Cooperation and Development the income gap is at its highest level in three decades, with the richest 10 percent of the population earning 9.6 times the income of the poorest 10 percent.

In the 1980s this ratio stood at 7 to 1, the OECD said in a report.

This longish article, also from the Zero Hedge website yesterday morning, is also courtesy of Dan Lazicki.

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The E-Mail That Helped Catch Barclays: ‘ISDAfix Is Manipulated’

Sometimes ISDAfix is manipulated.

Those words, taken from an e-mail written by a Barclays Plc options trader, came back to haunt the bank Wednesday as it settled U.S. government allegations that it attempted over five years to rig one of the world’s most important rate benchmarks.

The Commodity Futures Trading Commission released some of the more than 1 million e-mails and recorded phone calls gathered during its nearly three-year investigation to show how the attempted manipulation worked.

It was a simple process, according to the CFTC: Barclays traders told their brokers to buy or sell as many interest-rate swaps as needed just before 11 a.m. New York time to push the benchmark in the desired direction.

This Bloomberg article appeared on their website at 2:59 p.m. Mountain Daylight time on Wednesday afternoon---and my thanks go out to Howard Wiener for finding it for us.

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Defiant Greeks force Europe to negotiating table as time-bomb ticks

Europe's creditor powers have started to wobble. Berlin, Paris and Brussels are coming to the grim conclusion that Greece may not capitulate as expected, and time is running out fast.

Athens is now warning openly that the "moment of truth" will come on June 5, when the country faces default on a €300m payment to the International Monetary Fund, unless the EU authorities hand over the next tranche of bail-out cash.

It would be hazardous to bet the integrity of monetary union on the assumption that this is just a bluff.

This must read Ambrose Evans-Pritchard commentary appeared on the Internet site at 9:30 p.m. BST on Wednesday evening---and I thank Roy Stephens for sharing it with us.

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German, Russian and Chinese companies race to buy up Greek infrastructure

Foreign corporations from countries including Germany, China and Russia are lining up to buy Greek state assets as the country struggles to pay its European creditors.

The sell-off includes major parts of Greece's infrastructure such as airports, ports, motorways and utilities., The website of the agency leading the government's privatisation drive details a host of real estate ready to be sold off, with deals listed as either 'in progress', 'rolling ahead' or 'completed'.

The move marks a U-turn from the ruling Left-wing Syriza party, who had previously resisted the privatisation programme imposed as part of the conditions attached to Greece's €245bn bailout from the so-called troika of the IMF, European Central Bank (ECB) and European Commission.

This story appeared on the Internet site at at 6:35 p.m. on Wednesday.  No time zone was stated, so it can be assumed that it's EDT.  A reader who wishes to remain anonymous sent it our way yesterday.

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Washington asks Athens to back anti-Russia sanctions - Greek minister

Greece has revealed it’s been asked by the U.S. to prolong anti-Russia sanctions. However, Athens stressed Russia is a strategic ally and the ‘sanction war’ is causing it an estimated loss of €4 billion a year.

"I was asked to support the prolongation of the sanctions, particularly in connection with Crimea. I explained the Ukrainian issue was very sensitive for Greece as some 300,000 Greeks live in Mariupol and its neighborhood, and they feel safe next to the Orthodox Church, " Defense Minister Panos Kammenos is cited as saying on the Ministry of National Defense website on Wednesday.

Russia is Greece's ally and a friendly country, our countries have "unbreakable ties" of common religion, and we have economic ties as well, the Minister told the Deputy US Defense Secretary Christine Wormuth during their meeting in Washington.

This story showed up on the Russia Today website at 1:51 p.m. Moscow time on their Thursday afternoon, which was 6:51 a.m. EDT in Washington.

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Obama Denies U.S. Losing War Against ISIL Despite Failure in Ramadi

On Sunday, following days of heavy fighting against Iraqi government forces, ISIL took control of the Sunni-dominated provincial capital of Ramadi, some 70 miles west of Baghdad.

No, I don’t think we’re losing,” Obama said in the interview. “There’s no doubt there was a tactical setback, although Ramadi had been vulnerable for a very long time.

The U.S. president attributed the fall of Ramadi to lack of Iraqi military training and command-and-control structures in Sunni areas of the country.

Hundreds of Iraqi security forces were killed and many more fled, prompting Iraqi Prime Minister Haider al-Abadi to call in Shiite militias to the outskirts of Ramadi to protect the capital and Shiite cities to the south.

This news item, filed from Washington, showed up on the Internet site at 8:03 p.m. Moscow time on their Thursday evening, which was 1:03 p.m. in Washington.  It's courtesy of reader M.A.

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With ISIS Controlling "More Than Half of Syria", the U.S. Prepares to Pounce

Just hours after ISIS scored a significant victory in Iraq when it captured the town of Ramadi over the weekend, the first Iraqi town that had been actively defended by the US as opposed to just Iraqi troops, overnight ISIS also captured the ancient Syrian town of Palmyra, which the mainstream media promptly concludes was proof that the Islamic State's momentum was growing.

Around a third of the 200,000 people living in Palmyra may have fled in the past few days during fighting between government forces and Islamic State militants, the U.N. human rights office said on Thursday.

That's not all: according to Reuters, "extending its reach in the region, fighters loyal to the Sunni Muslim group have also consolidated their grip on the Libyan city of Sirte, hometown of former leader Muammar Gaddafi."

"ISIL has reportedly been carrying out door-to-door searches in the city, looking for people affiliated with the government. At least 14 civilians are reported to have been executed by ISIL in Palmyra this week," Shamdasani said in e-mailed comments.

This Zero Hedge article showed up on their website at 3:53 p.m. on Thursday afternoon---and it's the second contribution in a row from reader M.A.

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China to spend billions as it seeks Latin American inroads

China and Brazil have unveiled multi-billion dollar trade, finance and investment deals as Premier Li Keqiang kicked off his first official trip in Latin America this week.

Landing first in Brazil, Li saw a raft of agreements signed, ranging from a $1 billion purchase of passenger jets made by Brazil’s Embraer to the lifting of an import ban on Brazilian beef. Infrastructure investment plans also include a controversial project to build a railroad that would slice across the Amazon and the Andes mountain range.

“A new road to Asia will open for Brazil, reducing distances and costs, a road that will take us directly to the ports of Peru and, across the Pacific Ocean, China,” President Dilma Rousseff said in reference to the rail link, inviting Chinese companies to build it.

“China wants to build the railway equivalent of the Panama Canal in the region,” Jean-François Dufour, president of the DCA Chine-Analyse consulting company, told FRANCE 24.

This news item was posted on the Internet site on Wednesday sometime---and my thanks go out to Roy Stephens for his final offering in today's column.

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The Gold Chronicles: May 18 , 2015 Interview with Jim Rickards

This audio interview with Jim runs for 57 minutes.  It's his monthly chat with the folks over at the Physical Gold Fund.  It was recorded on Monday---and I thank Harold Jacobsen for sending it along yesterday.

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Reuters: CME developing European gold futures contract

The Chicago Mercantile Exchange is developing a European gold futures contract to serve customers in London, three sources familiar with matter said, which could present a direct challenge to London's traditional cash market.

The contract would mirror existing futures traded on CME's New York COMEX platform, which has a 100-ounce contract size and typically trades volumes of between 15 million and 20 million ounces daily.

That is the world's most liquid gold contract, essentially setting the benchmark for bullion futures globally.

"The CME has been working on a loco (deliverable in) London futures contract for a while," one source familiar with the matter said. "Comex futures are deliverable at Comex warehouses, but instead with London futures you would take delivery at your London vault. Potentially they would see a lot more futures being delivered if customers could have London gold."

I must admit that I wasn't happy to see this story, so I fired it off to Ted Butler----and here is his response---"A little known fact is that the vast majority of al the new contracts introduced by the CME fail miserably. I would put this contract in that category, but time will tell."  This Reuters piece, filed from London, appeared on their website at 4:23 p.m. BST yesterday afternoon London time--and I found it embedded in a GATA release.

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Gold demand slows as China eyes equities; lack of weddings in India weighs

Gold buying was slow this week in Asia even as global benchmark prices dropped from a three-month high, with the Chinese hooked on surging equities while demand in India stayed weak and was unlikely to pick up as the wedding season cools.

Premiums for bullion over international spot prices dropped in Hong Kong while prices in India were on par with the global benchmark.

"Demand is extremely slow. Customers are focusing on equity markets and aren't really interested in gold for the time being," said Dick Poon, general manager at Heraeus Precious Metals in Hong Kong.

Gold premiums in Hong Kong dropped to around 50 cents an ounce, he said, from over a dollar last week.

Considering the frantic pace that gold is being imported into both India and China, one wonders how seriously this story should be taken.  This Reuters article, filed from Singapore, appeared on their website at 11:06 a.m. IST on their Friday morning---and it's something I found on the Sharps Pixley Internet site at 2 a.m. EDT.

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Koos Jansen: China's gold purchases -- separating facts from speculation

Gold researcher and GATA consultant Koos Jansen outlines the arguments for and against thinking that the People's Bank of China obtains gold through the Shanghai Gold Exchange, a determination critical to estimating how much metal has been brought into the country's gold reserves.

Jansen is inclined to think that the central bank is obtaining its gold outside the exchange and outside "visible" channels, since government purchases of gold can be the most sensitive state secrets. Jansen's very long commentary is headlined "PBOC Gold Purchases: Separating Facts from Speculation" and it was posted on the Internet site yesterday.  I thank Chris Powell for the introductory paragraphs above.

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May 21, 2015

Big banks plead guilty to currency market-rigging conspiracy, will pay $5.8 billion

Six of the world's biggest banks will pay $5.8 billion and five of them agreed to plead guilty to charges tied to a currency-rigging probe as they seek to wind down almost half a decade of enforcement actions.

Citicorp, JPMorgan Chase & Co., Barclays Plc, and Royal Bank of Scotland Plc agreed to plead guilty to conspiring to manipulate the price of U.S. dollars and euros in settlements with the Justice Department announced in Washington today. The main banking unit of UBS Group AG agreed to plead guilty to charges related to interest-rate manipulation. The Swiss bank, the first to cooperate with antitrust investigators, was granted immunity in the currency probe.

The four banks that agreed to plead guilty to currency charges are among the world's biggest foreign-exchange traders. They were accused of colluding to influence benchmark rates by aligning positions and pushing transactions through at the same time. Traders who described themselves as members of "The Cartel" used online chat rooms to discuss their positions in the minutes before the rates were set, the Justice Department said.

That leaves only the precious metal markets that JPMorgan et al haven't been been found guilty of rigging, but you know that they're doing it, even if they're never found guilty of it.  This Bloomberg story appeared on their Internet site at 8:00 a.m. Denver time yesterday morning---and I found it embedded in a GATA release.  The New York Times spin on this, courtesy of Roy Stephens, is headlined " Rigging of Foreign Exchange Market Makes Felons of Top Banks".  BUT NOBODY'S GOING TO JAIL!!!  And until that happens, this will never end.

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Trannies Tumble, S&P/Dow Give Up Week's Gains

Bond yields are leaking higher, The U.S. Dollar is flat (but noisy), but with no macro data to spark a momo run, U.S. equities have tumbled out of the gate... especially Dow Transports. Dow and S&P are back to unchanged on the week...

BTFD? Well we are sure the FOMC Minutes will be spun dovishly.

Trannies are in trouble again - Down 6% YTD... worst start to a year since 2009

This story appeared on the Zero Hedge website less than twenty minutes after the equity markets opened yesterday---and it's courtesy of Dan Lazicki.  The two embedded charts are worth a glance.

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Stocks Pump-And-Dump After Ministry of Truth 'Manipulation' Trumps Spoofing Algos

Thanks to the spoofing, stocks soared to record highs after the FOMC Minutes to prove that everything is awesome---but then CNBC broke the news that BEA will double-seasonally-adjust GDP data - implicitly enabling Q1 to look better and thus giving Janet more room to hike in June  - and stocks sunk...

The bottom line: stocks were so obviously manipulated higher today after FOMC to prove the Fed is right it was disgusting... not just the actual indications of spoofing but the fact that stocks entirely decoupled from the "DEADNESS" of every other asset class after the minutes hit.

Then when BEA hit with their agreement over double-seasonal-adjustments, the farce was complete, stocks tanked on the bad news.

This chart-filled commentary from Zero Hedge showed up four minutes after the closing bell yesterday---and it's worth a minute of your time.  It's also the second offering in a row from Dan Lazicki.

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Stocks Slump After Liesman Reports GDP to Be "Double Seasonally-Adjusted" Upward

The San Francisco Fed decided that the weak Q1 GDP data simply needed to be seasonally adjusted (again) in order to make it ...well, less weak.

The official estimate of real GDP growth for the first three months of 2015 was shockingly weak. However, such estimates in the past appear to have understated first-quarter growth fairly consistently, even though they are adjusted to try to account for seasonal patterns. Applying a second round of seasonal adjustment corrects this residual seasonality. After this correction, aggregate output grew much faster in the first quarter than reported.

Got that? There was still some "residual seasonality" (i.e. the data still looked weak) in the Q1 print after the first round of seasonal adjustments, so in order to "correct" things, a second round of seasonal adjustments needs to be applied, after which the new figures should show that the economy did not in fact flat-line in the first three months of the year. Of course if the numbers still don't come out looking the way you want them, you can always rinse and repeat. As we put it two days ago:

And if the double seasonally adjusted data doesn't work? Why triple adjust it, then quadruple adjust it, until you get precisely the goalseeked number you want, as US economic "data" promptly devolve to a level of ridiculousness that will make even the Chinese Department of Truth turn green with envy.

Sure enough, just moments ago, CNBC's Steve Liesman (who else) reports that the double seasonal adjustments are indeed in the works.

Well, dear reader, things are just getting more outrageous all the time.  This is another Zero Hedge article from Wednesday afternoon that's courtesy of Dan Lazicki.

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Even Harvard Economists Admit Fed Policy Has "Created Dangerous Risks"

No lesser establishment economist than Martin Feldstein - Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research - has some warning words of wisdom for The Fed today: "...the Fed’s unconventional monetary policies have also created dangerous risks to the financial sector and the economy as a whole." When even The Ivory Tower is losing faith, you know The Fed is in trouble...

This commentary by Feldstein was embedded in another Zero Hedge piece from yesterday---and it's also courtesy of Dan L.

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The Treasury Bond Bull Market Will Persist -- Jim Rickards

How many times have you heard the phrase “bond bubble” in the past three years?

It seems that every time you turn on financial television or go to a financial website, there’s an analyst warning you about a bond bubble about to burst. The commentary usually consists of the observation that “interest rates are near an all-time low” and “have nowhere to go but up.”

There’s not much more to the analysis than that. In fact, interest rates are near all-time highs and could drop significantly, setting off one of the greatest bond market rallies in history.

Allow me to explain…

This commentary by Jim appeared on the Internet site yesterday sometime---and it's another contribution from Dan Lazicki. [Note: Jim says that "Russia invaded Crimea in 2014".  They did not.  Crimea voted over 90 percent to return to Russia from whence they came, after being "gifted" to the Ukraine by Khrushchev in 1954 - Ed] 

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For Caterpillar, This is What the "Second Great Depression" Looks Like

According to the latest CAT retail sales data, Caterpillar has now reported an unprecedented 29 months of declining global retail sales, with the month of April seeing a 16% Y/Y collapse in China (after a 25% plunge in 2014 and a 20% plunge the year before), while Latin America just suffered an epic 44% Y/Y crash, the biggest going back to 2009, after a 28% drop the year before.

Or as far as the industrial and heavy equipment bellwether is concerned, the emerging markets (or BRICS) are in an unprecedented economic collapse.

To put Caterpillar's ongoing second great depression in context, during the Great Financial Crisis, CAT suffered "only" 19 months of consecutive retail sales declines. As of April 2015, this number is now 29, and there is no hope in sight of seeing an annual rebound any time soon.

This short Zero Hedge article appeared on their Internet site at 10:55 a.m. EDT on Wednesday morning---and it's definitely worth your time.  This is the real economy talking.  Once again I thank Dan Lazicki for finding it for us.

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Paul wages Patriot Act filibuster with call for an 'open rebellion'

Presidential hopeful Sen. Rand Paul is speaking from the Senate floor Wednesday in what he is calling a filibuster of extending the Patriot Act.

"I will not let the Patriot Act, the most unpatriotic of acts, go unchallenged," Paul said. "The bulk collection of all Americans' phone records all of the time is a direct violation of the Fourth Amendment."

Paul's hours-long speech also marks a potentially savvy political move, allowing the Kentucky Republican, and his presidential campaign, to dominate the media spotlight for hours Wednesday afternoon.

Paul brushed aside criticisms from his colleagues that letting the Patriot Act expire would threaten national security.

"Couldn't we just for a couple of hours live under The Constitution?" he asked.

This commentary was posted on website at 2:03 p.m. EDT yesterday afternoon---and the stories from Dan just keep on coming.

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Euro slides on Greece default fears

The euro fell to a two-week low on Wednesday following a Greek government warning that it will miss the June 5 IMF payment deadline without a deal with the Troika by then.

The single currency traded at $1.1115, down 0.4 percent at 11:36 a.m. MSK on Wednesday. It declined 0.71630 against the British pound and 134.34 against the Japanese yen.

“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5. If there is no deal by then that will address the current funding problem, they won’t get any money.”

The country owes more than €320 billion to its external creditors, and is counting on a €7.2 billion International Monetary Fund loan installment. Last week the country raided its International Monetary Fund reserves for a €750 million debt payment to the IMF.

This news item appeared on the Russia Today website at 11:45 a.m. Moscow time on their Wednesday morning, which was 4:45 a.m. EDT in Washington.  I thank Roy Stephens for sending it along.

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The Adults Are Back——Kerry Throws In the Towel on Ukraine

The U.S. seems to admit it overplayed its hand over Ukraine. Caving to reality is actually the best possible policy.

It is just as well Secretary of State John Kerry’s momentous meetings with Russian leaders last week took place in Sochi, the Black Sea resort where President Putin keeps a holiday home. When you have to acknowledge that two years’ worth of pointless hostility in the bilateral relationship has proven none other than pointless, it is best to do so in a far-away place.

Arriving in the morning and leaving in the afternoon, Kerry spent three hours with Sergei Lavrov, Russia’s very competent foreign minister, and then four with Putin. After struggling with the math, these look to me like the most significant seven hours the former senator will spend as this nation’s face abroad.

Who cannot be surprised that the Obama administration, having turned the Ukraine question into the most dangerous showdown since the Cold War’s worst, now declares cordiality, cooperation and common goals the heart of the matter?

The question is not quite as simple as one may think.

This commentary falls into the absolute must read category for any serious student of the New Great Game---and is the only absolute must read in today's column.  I was going to save it for Saturday for length reasons, but after having read it myself, I though it best to insert it into today's missive.  It was posted on the Internet site on Tuesday at 5 p.m. Denver time---and I borrowed the above headline from David Stockman's reposting of it.  The actual headline reads "John Kerry admits defeat: The Ukraine story the media won’t tell, and why U.S. retreat is a good thing"---and I thank Roy Stephens for bringing it to my attention---and now to yours.

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Washington Throws in the Towel on Ukraine, Shifts to 'Plan B'

Obama has thrown in the sponge for Ukraine, Eric Zuesse underscored, adding that Washington is now "on-board with the ‘Plan B’ for Ukraine," which means implementing the provisions of the Minsk II accord.

International media have failed to highlight the ultimate failure of Washington's policy in Ukraine, investigative historian Eric Zuesse emphasized, referring to remarks by U.S. Secretary of State John Kerry in response to Petro Poroshenko's oath to retake Crimea and the Donetsk Airport.

"I have not had a chance – I have not read the speech. I haven't seen any context. I have simply heard about it in the course of today [which would be shocking if true]. But if indeed President Poroshenko is advocating an engagement in a forceful effort at this time, we would strongly urge him to think twice not to engage in that kind of activity, that that would put Minsk in serious jeopardy. And we would be very, very concerned about what the consequences of that kind of action at this time may be," John Kerry said during a press conference in Sochi, as cited by the historian.

Eric Zuesse stressed that the remark has clearly demonstrated that the Obama administration has thrown in the towel on Washington's original plan for Ukraine, which was purportedly aimed at an all-out military invasion of the eastern regions.

This news story, filed from Moscow, showed up on the Internet site at 7:26 p.m. Moscow time on their Wednesday evening---and it's certainly worth reading.  I thank Roy Stephens for his second article in a row.

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Russia to take legal moves if Ukraine defaults on $3bn debt - finance minister

Russia will appeal to the International Court of Justice if Ukrainian President Petro Poroshenko signs a moratorium on the payment of Ukraine’s external debt into law and fails to pay its debt to Russia, said Russian Finance Minister Anton Siluanov.

Siluanov said Ukraine was virtually defaulting on its debt, adding that Russia doesn’t yet have grounds to lodge any claims. If Kiev fails to pay $75 million in June, Moscow will use its right to appeal to the court, the Minister said.

The Ukrainian parliament has adopted a law allowing the country not to pay foreign debt to private lenders, saying it needs to protect the ailing economy and people from “unscrupulous” creditors.

The bill says the $3 billion in Ukrainian Eurobonds purchased by Russia at the end of 2013 are on the list of liabilities subject to a possible payment moratorium.

This article put in an appearance on the Russia Today website at 11:01 a.m. Moscow time yesterday morning---and I thank Roy Stephens for sharing it with us.

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China Factory Index Shrinks for 3rd Month

A report says manufacturing in China shrank for the third month in a row in May as demand remained soft, raising the chances of further stimulus from Beijing.

The preliminary version of HSBC's purchasing managers' index came in at 49.1. That's slightly better than the 48.9 recorded in April but still in contractionary territory on the 100-point index. Numbers above 50 indicate expansion.

The report said that factory production decreased from last month's no-change level, falling to its lowest in 13 months.

This short AP story ended up on the Internet site at 10:35 p.m. EDT Wednesday evening---and I thank West Virginia reader Elliot Simon for digging it up for us.  It's worth a quick read.

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Against Beijing? U.S. Holds Asian Military Summit, Excludes China

As the United States struggles to maintain influence in the South China Sea, it has pushed Pacific nations to assert themselves against Beijing. In that effort, Washington organized a gathering of military leaders from over 20 countries, specifically excluding China.

A first-of-its-kind event, the United States hosted the PACOM Amphibious Leaders Symposium in Hawaii for Pacific nation commanders to discuss amphibious military capabilities. In attendance are representatives from Japan, Australia, the Philippines, Malaysia, Vietnam, and many others.

During the event, military leaders were flown aboard the USS Essex and given a demonstration of the U.S. Marines amphibious assault capabilities.

This news item appeared on the Internet site at 2:16 a.m. Moscow time on their Thursday morning, which was 7:16 p.m. Wednesday evening in Washington.  Once again I thank Roy Stephens for sending it our way.

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Ray Dalio Slams Buffett For Being "Wrong on Gold", Says "Social Disruption" is Inevitable

Given the recent resurgence of precious metals and the looming 'endgame' of Federal Reserve faith, we thought dusting off the following 160 seconds of uncomfortable truth from Bridgewater's Ray Dalio was worthwhile...

"We're beyond the point of being able to successfully manage this... and I worry about another leg down in the economy causing social disruption... Hitler came to power in 1933 because of the social tension between the factions."

"Gold should be a part of everybody's portfolio to some degree because... it is the alternative money.  Warren Buffett is making a big mistake."

This 2:40 minute video clip is of unknown age, as the opening paragraph states "dusting off"---but it certainly is worth watching if you haven't seen it before, which I hadn't.  I thank Dan Lazicki for his final contribution to today's column.

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It’s Time to Hold More Cash and Buy Gold -- Citigroup

Gold is a regarded as a hedge against market turbulence by Bank of America who, in a note to clients, advised holding gold and paper currency at this time.

Bloomberg report that Bank of America Merrill Lynch describe the markets as being in a “Twilight Zone” – the zone between the end of QE and the Fed beginning to raise rates to try to bring normality back into the markets.

To deal with this they advocate adding gold to one’s portfolio along with higher levels of cash. Citing factors such as liquidity, profits, technological disruption, regulation, and income inequality they say there exists a potential for a “cleansing drop in asset prices.

This commentary appeared in Mark O'Byrne's column over at the Internet site yesterday---and it's certainly worth skimming.

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UBS Shielded From Charges in U.S. Precious-Metals Probe

UBS Group AG won immunity from criminal fraud charges in a Justice Department investigation into misconduct in the trading of precious metals.

The Swiss bank’s main UBS AG unit won’t be charged by the department’s criminal division for information the firm disclosed to prosecutors about precious-metals transactions, according to the company’s plea agreement released on Wednesday to resolve a probe into interest-rate manipulation.

Prosecutors have been investigating whether at least 10 banks, including Barclays Plc, JPMorgan Chase & Co. and Deutsche Bank AG, manipulated prices of precious metals such as silver and gold, Bloomberg reported in February. The scrutiny follows international probes into the rigging of financial benchmarks for rates and currencies, which have yielded billions of dollars in fines.

This Bloomberg news item was posted on their website at 1:01 p.m. yesterday afternoon Denver time---and I found it on the Sharps Pixley website in the wee hours of this morning.

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Indian banks doubt that gold paperization scheme will do much

A proposal in India to attract thousands of tonnes of gold owned by households into a bank deposit scheme will likely fail in its current form as it does not address some key concerns for banks and consumers.

Support from banks would be crucial for the success of the monetisation plan. Deposit schemes, similar to the one proposed on Tuesday by the Narendra Modi-led government, have previously failed as the incentives offered were not profitable for banks.

The idea is to attract gold lying idle among Indian homes into the banking system. This amounts to an estimated 20,000 tonnes of gold -- or almost seven times global annual output.

This gold-related Reuters article, co-filed from Singapore and Mumbai, was posted on their website at 9:24 a.m. EDT on Wednesday morning.  It's actual headline is "India's gold monetisation plan lacks lustre - industry"---and I found it in another GATA release.  It's not overly long---and it's worth reading, as it goes hand-in-hand with the other stories on this issue that appeared in my Wednesday column.

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Chinese Gold Standard Would Need a Rate 50 Times Bullion's Price

A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion's price now, according to Bloomberg Intelligence.

A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there's no evidence that the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published today. Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said.

Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote. Theoretically, to create an exchange rate of one ounce of gold for every $64,000, the country would need about 10,000 metric tons of the metal, they estimated. That's nine times the nations official holdings and about 6 percent of all the bullion ever mined globally.

Well, dear reader, I don't know about you, but I'd be happy with a gold price five times what it is now.  This Bloomberg article showed up on their Internet site at 5:16 a.m. MDT yesterday morning---and I found it on the Internet site.

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Will China go for a gold standard? The jury is out! -- Lawrence Williams

I listened today (20th May) to an exceedingly interesting presentation by Ken Hoffmann, Bloomberg’s Global Head of Metals & Mining Research at the very well attended Global Mining Finance Precious and Base metals event in London. The talk was entitled ‘China: Brace for a hard landing and a new ‘Gold Standard’ and related to research conducted by Bloomberg analysts which was only released about half an hour earlier than the talk.

While Hoffmann may not have answered the question posed by the talk title directly, and a ‘gold standard’ in the old sense may not be realistic given that to back the yuan physically with gold would require either more gold than the world has ever produced (at the current price levels) or perhaps if China can accumulate 10,000 tonnes of gold, a gold price of $64,250 an ounce would be required. (China currently has official holdings of 1,054 tonnes as reported to the IMF, but is widely believed to have accumulated far more held in separate accounts not yet reported to the IMF.  Bloomberg analysts suggested it might have an additional 2,500 tonnes in such accounts – others put the figure rather higher, but until and unless China comes clean with a ‘true’ figure we just don’t know – and even then we may still not know for sure given the somewhat opaque nature of Chinese government statistics).

Lawrie has a go at the Bloomberg story posted above---and this very interesting commentary of his is worth your while.  It was posted on the Internet site at 4:22 p.m. BST in London yesterday---and the first reader through the door with it was Roy Stephens.

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Americans Fear Beijing, Moscow May Introduce New Gold Standard

China is planning to introduce the gold fixing reference price in yuan. Americans fear that China could introduce a new gold standard to displace the dollar, DWN reported.

The competition for London gold-market has grown after the Chinese Shanghai Gold Exchange (SGE) established an International Chamber of Commerce in the free trade zone of the city, providing for free capital flows, Deutsche Wirtschafts Nachrichten reported.

China is the world's largest gold producer and is, logically, interested in the possibility to influence the determination of the gold price.

According to a market participant, China will have its fixing price before the end of the year, with the country experiencing a rapid development of its gold market, Financial Times reported.

This is another interesting article on the same issue---and it seems to have come out entirely independently of the above two stories.  This one appeared on the Internet site at 4:37 p.m. Moscow time on their Wednesday afternoon, which was 9:37 a.m. EDT in New York.  It's the final offering of the day from Roy Stephens, for which I thank him.

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May 20, 2015

Housing Starts Surge to Highest Since Nov 2007, Permits at 7 Year Highs

Following two ugly months of dramatically missed expectations, Housing Starts exploded to 'recovery' highs (highest since Nov 2007) jumping 20.2% MoM to 1.135million (against 1.015 exp.). This is the 2nd biggest MoM jump in history.

Both single-family (3rd biggest MoM surge since the crisis peak) and multi-family starts surged. Permits also surged in April (jumping 10.1% MoM - the most since 2012) to 1.143 million (well above expectations) and the highest since June 2008.  and  Well these huge mal-investment spikes make perfect sense in light of the collapse in lumber prices (and thus demand).

This chart-filled Zero Hedge piece from 8:40 a.m. EDT on Tuesday morning is worth running through---and I thank reader M.A. for today's first story.

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Bond-Market Crash Has Wall Street Divided on What’s Next

Maybe, just maybe, this whole bond rout is ending.

The global sell-off that’s set investors on edge finally slowed last week, and some analysts are saying the worst is over. Treasuries look fairly valued given the outlook for inflation and interest rates, according to Bank of America Corp. -- although with plenty of caveats. In Germany, options traders convinced a bund-market crash was all but inevitable less than two weeks ago have scaled back most of those bets.

Goldman Sachs Group Inc. warns that government debt is still expensive, but a growing number of investors are finding value after the four-week exodus sent yields soaring. Prudential Financial Inc.’s Robert Tipp is buying because tepid U.S. growth will keep the Federal Reserve on hold, while Europe remains too weak to sustain higher yields.

“There’s a good chance people will look back at this as having been a good buying opportunity,” Tipp, the chief investment strategist at Prudential’s fixed-income unit, which manages $560 billion, said from Newark, New Jersey.

This Bloomberg article from Sunday afternoon Denver time was something I found in yesterday's edition of the King Report.

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Someone Finally Read Obama's Secret Trade Deal and Admits the TPP "Will Damage This Nation"

I’ve Read Obama’s Secret Trade Deal. Elizabeth Warren Is Right to Be Concerned. 

"You need to tell me what’s wrong with this trade agreement, not one that was passed 25 years ago,” a frustrated President Barack Obama recently complained about criticisms of the Trans Pacific Partnership (TPP). He’s right. The public criticisms of the TPP have been vague. That’s by design—anyone who has read the text of the agreement could be jailed for disclosing its contents. I’ve actually read the TPP text provided to the government’s own advisers, and I’ve given the president an earful about how this trade deal will damage this nation. But I can’t share my criticisms with you.

I can tell you that Elizabeth Warren is right about her criticism of the trade deal. We should be very concerned about what's hidden in this trade deal—and particularly how the Obama administration is keeping information secret even from those of us who are supposed to provide advice.

So-called “cleared advisers” like me are prohibited from sharing publicly the criticisms we’ve lodged about specific proposals and approaches. The government has created a perfect Catch 22: The law prohibits us from talking about the specifics of what we’ve seen, allowing the president to criticize us for not being specific. Instead of simply admitting that he disagrees with me—and with many other cleared advisers—about the merits of the TPP, the president instead pretends that our specific, pointed criticisms don’t exist.

I posted a story about this in my Saturday column, I believe---but here's the Zero Hedge take on it---and it's definitely worth reading.  I thank Dan Lazicki for sharing it with us.

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U.K. Inflation Falls Below Zero for First Time Since 1960

Britain’s inflation rate fell below zero for the first time in more than half a century, as the drop in food and energy prices depressed the cost of living.

Consumer prices declined 0.1 percent in April from a year earlier, the Office for National Statistics said in London on Tuesday. Economists had forecast the rate to be zero, according to the median of 35 estimates in a Bloomberg News survey. Core inflation slowed to 0.8 percent, the lowest since 2001.

With inflation so far below the Bank of England’s 2 percent target, policy makers are under little immediate pressure to raise the key interest rate from a record-low 0.5 percent. Governor Mark Carney said last week that any period of falling prices will be temporary and an expected pickup in inflation at the end of the year means the next move in borrowing costs is likely to be an increase.

“For now, it represents an obstruction to a BOE rate hike,” said Alan Clarke, an economist at Scotiabank in London. “Enjoy it while it lasts because there is a good chance that inflation will be back in positive territory next month.”

This Bloomberg article showed up on their Internet site at 2:30 a.m. Denver time yesterday morning---and I thank West Virginia reader Elliot Simon for finding it for us.

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Europe faces second revolt as Portugal's ascendant Socialists spurn austerity

Europe faces the risk of a second revolt by Left-wing forces in the South after Portugal’s Socialist Party vowed to defy austerity demands from the country’s creditors and block any further sackings of public officials.

"We will carry out a reverse policy,” said Antonio Costa, the Socialist leader.

Mr Costa said a clear majority of his party wants to halt the “obsession with austerity”. Speaking to journalists in Lisbon as his country prepares for elections - expected in October - he insisted that Portugal must start rebuilding key parts of the public sector following the drastic cuts under the previous EU-IMF Troika regime.

The Socialists hold a narrow lead over the ruling conservative coalition in the opinion polls and may team up with far-Left parties, possibly even with the old Communist Party.

This Ambrose Evans-Pritchard commentary put in an appearance on the Internet site at 6:00 p.m. BST yesterday evening, which was 1:00 p.m. in Washington.  I thank South African reader B.V. for bringing it to our attention.

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Merkel Faces German Parliament "Revolt" on Greece

German Chancellor Angela Merkel is considering delivering a keynote address to make the case for aiding Greece as she faces down a potential revolt from as much as a third of her bloc’s lawmakers.

Merkel would hold the speech after Greece and its creditors agree on a deal with conditions she deems strong enough to sell to parliament and the German public, according to two government officials. She would argue that a Greek exit from the euro area would risk causing geopolitical instability in the region, said the officials, who asked not to be identified because the discussions are private.

Merkel’s desire to keep Greece in the euro is fraught with political risk given the level of exasperation in Germany with Prime Minister Alexis Tsipras after four months of brinkmanship. While some German policy makers have hardened their stance against helping Greece, others are hinting at more flexibility to avert a financial collapse.

“Should we seriously go and prescribe in detail what the Greeks are allowed to spend and what revenue they can have?” Deputy Finance Minister Thomas Steffen said in an interview. “I say no. It’s the rough framework that has to be clear.

This is the Zero Hedge spin on an embedded Bloomberg story from very early yesterday morning MDT---and it's worth reading.  It's another offering from Dan Lazicki.

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Greek economy is bleeding 600 jobs a day, €22 million in GDP

The gridlock over the country's eurozone future is resulting in record numbers of lost jobs and a destruction in growth potential, according to figures from the Hellenic Confederation of Commerce and Enterprise (ESEE),

Since Syriza took office in late January, an average 59 small businesses have shut up shop, with approximately 613 jobs destroyed every single day, say ESEE.

Having suffered from the worst depression in the developed world since the 1930s - losing a quarter of its output - Greece's renewed political crisis has shattered the fragile business confidence in the country.

More than a third of all bank loans are now classed as "bad" (or non-performing), while the ESEE notes that more than 95pc of all applications for bank loans are rejected every day.

This news item was posted on The Telegraph's website at 1 p.m. London time on their Tuesday afternoon---and I thank Roy Stephens for sending it along.  It's worth reading.

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Ukraine vote gives government power to suspend foreign debt payments

Ukraine’s parliament on Tuesday handed ministers the power to suspend foreign debt payments to defend against “unscrupulous” creditors.

The vote was the latest episode in an escalating row over a $25bn (£16bn) rescue package with the International Monetary Fund and European Union.

In case of attacks on Ukraine by unscrupulous creditors, this moratorium will protect state assets and the state sector,” the prime minister Arseniy Yatsenyuk said.

Finance minister Natalie Jaresko said the overwhelming vote in the Rada, allowing the government to suspend payments to Ukraine’s international sovereign debt-holders, was “an important protection for citizens who are already shouldering a heavy burden due to the war in the east”.

This story showed up on Internet site at 8:22 p.m. BST yesterday evening, which was 3:22 p.m. in New York.  The Bloomberg spin on this news item is headlined "Ukraine Piles Pressure on Creditors Payment-Delay Powers"---and both are courtesy of Jim Skinner.

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Why the U.S. is Finally Talking to Russia -- Pepe Escobar

So a woman walks into a room… That’s how quite a few jokes usually start. In our case, self-appointed Queen of Nulandistan Victoria “F**k the E.U.” walks into a room in Moscow to talk to Russian deputy foreign ministers Sergei Ryabkov and Grigory Karasin.

A joke? Oh no; that really happened. Why?

Let’s start with the official reactions. Karasin qualified the talks as "fruitful", while stressing Moscow does not approve of Washington becoming part of the Normandy-style (Russia, Ukraine, Germany and France) negotiations on Ukraine. Not after the relentless demonization not only of the Kremlin but also of Russia as a whole since the Maidan coup.

Ryabkov, for his part, made it known the current state of the US-Russia relationship remains, well, corrosive.

This very interesting commentary by Pepe certainly falls into the must read category for any serious student of the New Great Game.  It appeared on the website at 4:28 p.m. Moscow time on their Tuesday afternoon---and I thank U.K. reader Tariq Khan for sending it our way.

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Warren Buffett and the Chinese Are Loading Up on Hard Assets

So, Warren Buffett comes with his own railroad. That means he has his own pipeline. So, Warren Buffett’s a guy who’s dumping paper money, getting into hard assets in the form of transportation and energy in particular. And the dollar could go to zero and it has no effect on him. He still owns a railroad

The other example are the Chinese. The Chinese have spent the last four years acquiring approximately 3,000 to 4,000 tons of gold. Now, how do we know that? We have some hard data. We know China’s mining output is about 450 tons a year. We know China’s imports through Hong Kong are coming in between 800 and 1,000 tons a year. This has been going on for four years so that’s kinda 6,000 tons there and where you have to use a little guesswork is okay, we know how much gold China is getting, how much is going to private consumption, how much is going to the government? We’re not as clear on that, but I use kinda half as the first approximation.

The gold is gonna go up like this so they’ve created a hedge where they win this way and they win this way so I would say look at China buying gold, look at Warren Buffett buying hard assets in energy and that will give some guidance. The two other ones, powerful, biggest, best and foreign investors in the world are getting out of paper money into hard assets.

This commentary by Jim is a rehash of what he's said before.  However, there is some new material in it, so it's still worth reading---and I thank Dan Lazicki for his final offering in today's column.

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Buffett Takes a Page from the “Inflation King’s” Playbook

Hugo Stinnes is practically unknown today, but this was not always the case.

In the early 1920s, he was the wealthiest man in Germany at a time when the country was the world's third-largest economy. He was a prominent industrialist and investor with diverse holdings in Germany and abroad.

Chancellors and Cabinet ministers of the newly formed Weimar Republic routinely sought his advice on economic and political problems. In many ways, Stinnes played a role in Germany similar to the one Warren Buffett plays in the U.S. today…

He was an ultra-wealthy investor whose opinion was eagerly sought on important political matters, who exercised powerful behind the-scenes influence, and who seemed to make all the right moves when it came to playing markets.

This commentary by Jim Rickards showed up in the Casey Research publication "On The Radar"---and it's also worth your time.

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History Shows a Gold Bull Market is Fast Approaching -- Jeff Clark

Yearning for sunnier skies for your gold investments? How’s this sound…

  • Gold in a decisive bull market, with the price steadily rising
  • Silver soaring and outpacing gold’s gains
  • Gold stocks rocking, erasing underwater positions and racking up the profits

That’s not pie in the sky wishful thinking—it accurately describes the next stage of the gold market, something that will soon visit your portfolio.

I'm hoping that Jeff has the inside track from Jamie Dimon, as it will be up to him [et al] if this comes to fruition.  But like you, dear reader, I'm praying he'll be right.  This commentary by Jeff showed up on the Casey Research website yesterday.

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India would offer tax exemption for earnings in gold paperization scheme

India will allow citizens to deposit gold with banks to earn interest as the world's second-biggest consumer seeks to cut reliance on imports by tapping idle bullion lying with households.

Individuals and institutions can deposit a minimum of 30 grams in the form of bullion or jewelry under a so-called gold monetization scheme, according to a draft document released by the government today. The banks can set the interest rate on the deposits and the metal mobilized may be loaned to jewelers, the government said.

Success in drawing out a part of the more than 20,000 metric tons of gold lying with households and institutions like temples may help India lower dependence on imports and ease pressure on the current-account deficit. While the plan proposes to ensure steady supply of bullion to jewelers, banks may benefit from a new business in a country where gold is bought during festivals and marriages as part of the bridal trousseau or given as a gifts in the form of ornaments.

The monetization plan will be limited to select cities initially as it requires a vast setup of infrastructure for secure handling of gold, according to the draft plan. Customers will have the option of redeeming deposits either in cash or in gold with a minimum tenure of one year. Investors may be exempted from paying capital gains tax, wealth tax, and income tax, the draft showed.

Good luck getting this up and running!  This very interesting Bloomberg story is a must read.  The above headline is courtesy of GATA's Chris Powell, but the real headline states "India Moves a Step Closer to Tapping 20,000-Tonne Gold Hoard".  It was posted on the Internet site at 3:19 MDT yesterday morning.

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Why India's latest gold paperization scheme will fail like the last one

The moot question is will the inhibitions that marred the earlier gold deposit scheme vanish. The answer sadly is in the negative.

The metal would be melted as hitherto much to the dismay and chagrin of women folk, to whom melting mangal sutra for example is abshagun, inauspicious and a strict no-no. That our ladies routinely lose out to the wicked jewelers on account of wastage but are finicky about melting on sentimental grounds need not detain us.

The tax exemptions mean a lot for those in the 30% income tax bracket as it would heighten the post-tax return on investments but temples and shrines like Tirumala Tirupati Dewastanam (TTD), Shirdi Sai Baba Trust, Mata Vaishneo Devi trust etc. are in any case tax-exempt.

And there is no guarantee that tax sleuths will not come calling hot on deposit, asking for the source, the irritant that bedeviled the earlier schemes as well.

Black money in this country finds sanctuary in real estate and gold. Gold has never come tumbling out of cupboards, lofts, and lockers enticed by interest, which pales before the tax consequences.

This extremely interesting article showed up on the Internet site at 8:15 a.m. India Standard Time [IST] on their Wednesday morning---and it's also worth reading.  I found it on the Internet site just before midnight Denver time last night.

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Has Gold Mine Cost Cutting Gone As Far As It Can Go? -- Lawrence Williams

The past three years have seen a concerted effort by producing gold miners to cut costs but has this now run its course with all those costs that are within the control of the mining companies already slashed perhaps as far as they can be? Indeed over the past year, the miners have been able to claim falling costs primarily through beneficial factors outside their own control.

Think on it. Much of the actual cost cutting over the past two to three years has come from dropping capital projects, reducing exploration expenditures, laying off surplus staff, cutting out layers of administration and a small amount from improvements in mining technology. Disposals of less profitable operations to leaner and meaner rivals and the closure of the least economic mines have also been playing their part in company boards being able to point to better cost figures all round. These figures have also been enhanced by mining to higher grades - thus producing more gold without increasing basic operating procedures, so costs per ounce of gold produced have appeared to fall as a consequence. But are these measures at the expense of mine lives, new project development and overall longer-term corporate viability?

Take nearly all these factors. Reducing exploration expenditures and cutting back on capital projects is bound to affect the longer-term potential of the company making the cuts. High grading reduces overall ore reserves and mineral resources. The only real 'cost cuts' are those achieved via permanent labor and administration reductions, changes in the mining plan and processing efficiencies to improve figures and the removal of loss making and marginal operations through sale or closure. Once these have been made, one might argue there is little further the companies can do (apart perhaps from reducing some of the over the top pay packages commanded by senior executives, but in truth these have little overall effect on the bottom line for the bigger companies).

This commentary by Lawrie was posted on the Internet site early yesterday morning EDT---and it's definitely worth reading.

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CME Group, with JPM nod, to launch zinc futures contract

CME Group Inc said on Monday it would launch a zinc futures contract next month, stepping up a global battle for metals market share with the London Metal Exchange amid expanding Asian markets.

CME’s announcement, which included a statement from JP Morgan Chase & Co expressing strong support for the move, said the new zinc contract will begin trading June 29. The first available U.S. delivery was targeted for October, pending regulatory reviews, CME said.

The statement did not explain JPMorgan’s role in the zinc contract, but a source familiar with the matter said JPMorgan “absolutely” intends to provide liquidity on the new market, adding to its existing market-making activities on the LME.

CME Group and JPMorgan team up to rig another market.  Well, dear reader, "providing more liquidity" is the same reason they use for being involved in the precious metal market---and that "liquidity" JPMorgan [et al] speak of is used to manage prices.   The question that begs to be asked is since they neither produce nor consume these metals, why are they there?  This Reuters article from yesterday found a home over at the Internet site---and it's worth skimming.

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May 19, 2015

UMich Consumer Sentiment Crashes as Surging Gas Prices Trump Stock Record Highs

Soaring gas prices dueled with soaring stock prices to leave University of Michigan Consumer Sentiment and it appears the former won. Printing at the weakest level since Oct 2014, UMich dropped to 88.6 (vs 95.9 expectations). This is the biggest miss on record.. and biggest MoM drop since Dec 2012. Both current conditions and expectations plunged despite surges in inflation expectations. Higher income expectations are starting to plunge - at their lowest in 7 months - and household finances are seen as the worst since July 2014. And finally, the survey's spokesperson says that respondents showed "concern over employment."

Gas prices are on the rise in Canada as well---and for what reason?  They started rising in this country long before the oil price began to rally off its low.  This 2-chart Zero Hedge piece showed up on their website last Friday morning---and it's something I found in yesterday's edition of the King Report.

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Volumeless VIXtermination Fuels Stock-Buying Frenzy To Record Highs

This Zero Hedge piece from yesterday was posted on their website just after the closing bell.  It's loaded with charts---and it shows the madness out there at the moment.  The first two, plus the bunds chart, were the ones that really stood out for me.  As Chris Powell said: There are no markets anymore, only interventions.  I thank reader M.A. for this story.

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Hedge Funds Close Doors, Facing Low Returns and Investor Scrutiny

For decades, nearly everything that the billionaire Julian Robertson touched turned to gold. Mr. Robertson, founder of the hedge fund Tiger Management, seeded a network of hugely successful “Tiger Cubs” — companies that in turn seeded more talent. It became the closest thing the hedge fund industry had to a dynasty.

Since the start of this year, however, the managers of three firms spun out of that gilded empire have called it quits after volatile performances and sometimes steep losses. They will return money to investors and focus on managing their own wealth.

TigerShark, Tiger Consumer and JAT Capital Management are just three examples among a recent wave of hedge funds that have closed their doors to investors in the face of choppy markets. They are a reminder that the hedge fund industry is not all spectacular returns.

This article appeared in The New York Times on Sunday---and I thank West Virginia reader Elliot Simon for sharing it with us.

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Obama announces new police standards, bans military equipment for local police

President Barack Obama announced federal standards to improve trust between police and communities and a ban on some types of military equipment for local police agencies.

Obama spoke on the measures Monday in Camden, N.J., a city that has struggled with one of the country's highest violent crime rates.

A blueprint for improved community policing was announced that will help cities and towns "develop policing strategies that work best for building trust between law enforcement and the communities they serve while enhancing public safety," a statement released by the White House said.

This UPI story, filed from Washington, showed up on their website late yesterday afternoon EDT---and it's the first offering of the day from Elliot Simon.

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Internet to Slip Out of U.S. Government Control by the End of 2015

Despite the wishes of a number of U.S. lawmakers, a plan is moving forward to transition control of the Internet away from the U.S. government and under the supervision of a global body. According to the web’s current key holder – and most of the world – that’s a good thing.

The web’s creation dates back to research commissioned by the U.S. government back in the 1960s. And besides, the government doesn’t own the Internet. No one does.

The U.S. oversees the Internet Corporation for Assigned Names and Numbers (ICANN). That nonprofit group is responsible for assigning Internet domain names and the corresponding numbers behind those addresses.

One year ago, the U.S. government announced plans to relinquish technical oversight by the Department of Commerce in favor of a "global multistakeholder community," like the United Nations.

On Thursday, the head of ICANN, Fadi Chehade, predicted that the privatization process would go through smoothly by year’s end, as all the necessary factors are nearly in place.

This interesting article was posted on the Internet site very early Saturday morning Moscow time---and I thank South African reader B.V. for finding it for us.

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Belligerent U.S. Refuses to Cede Control Over IMF in Snub to China

The Obama administration signaled it won’t jeopardize the U.S. power to veto IMF decisions to achieve its goal of giving China and other emerging markets more clout at the lender, according to people familiar with the matter.

That message was delivered at the International Monetary Fund’s spring meetings in Washington last month, the people said, where officials discussed how to overcome congressional opposition to a 2010 plan to overhaul the lender’s voting structure.

A solution backed by Brazil would have enabled an end-run around Congress -- while potentially sacrificing the veto the U.S. has held since World War II. With that option off the table, the people said, IMF member nations are considering a watered-down proposal that risks alienating China and India, which are already challenging the postwar economic order by setting up their own lending and development institutions…

This is another piece from the Zero Hedge Internet site.  It's their spin on an embedded Bloomberg story.  It was posted on their website at 2:15 p.m. EDT on Sunday---and it's worth reading.  It's another contribution from reader B.V.

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Ratings agency Fitch to downgrade many European banks - newspaper

Ratings agency Fitch will soon downgrade European banks en masse, possibly even at the start of the week, German newspaper Handelsblatt said, citing unnamed financial sources.

In most cases the banks will be downgraded by between one and a maximum of four levels, according to an advance copy of an article due to be published on Monday.

Fitch was not immediately available to comment when contacted by Reuters. Handelsblatt said a spokesman did not want to comment on the report.

The move would be a reaction to European governments having become less willing to prop up banks if they get into a crisis, the newspaper said.

This short Reuters news item, filed from Berlin, put in an appearance on their website early Sunday afternoon EDT---and it's the second contribution of the day from Elliot Simon.  It's certainly worth skimming.

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Juncker denies Greek rescue plan as negotiations reach 'final stages'

The president of the European Commission has reportedly intervened in Greece's bail-out negotiations, proposing a reduction in Troika-imposed budget targets and a release of emergency cash to prevent Greece going bankrupt in the summer.

According a blueprint leaked to Greek media, Jean-Claude Juncker's "plan" to break Greece's deadlock includes a relaxation of Athens' primary budget surplus target to 0.75pc this year - half that previously sought by Greece's paymasters.

The proposals also include releasing €5bn to the government in June, and delaying a number of fiscal austerity measures until October. However, the blueprint maintained that Greece would have to retain a controversial property tax and push for flexible labour market reforms.

Despite refusing to confirm the plan, a spokesman for Mr Juncker said the EU chief was now "personally involved" in Greece's talks.

This story showed up on The Telegraph's website at 6:30 p.m. BST yesterday evening, which was 1:30 p.m. EDT in Washington.   It's the second offering of the day from Roy Stephens. [Note: This story has been totally re-written since I posted it early yesterday evening---and I discovered the change when I was editing today's column at 4 a.m. EDT this morning.  It used to be headlined "Juncker steps in with emergency Greek rescue as negotiations reach 'final stages'"---and you'll note that the text has been changed from what's posted above as well. - Ed]

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Europe should overcome U.S. pressure, resume cooperation with Russia - Duma chief

State Duma Speaker Sergey Naryshkin has urged European politicians to stop listening to U.S. propaganda and start working on common Eurasian economic interests with Russia.

Naryshkin expressed his views on the best possible course for European politics in an article entitled “Natural Allies”, published on Monday in the Russian government daily Rossiiskaya Gazeta.

He wrote that the foundations of the European Union or “Big Europe” had been laid by people who remembered the lessons of the First and Second World Wars and these people still assert NATO’s eastward expansion was a mistake. Europe is taking great risks if it remains in the political wake of a nation located thousands of miles from the European continent. The Ukrainian crisis is yet another confirmation of the fact that E.U. member countries must decide on their foreign policies without any foreign interference, he noted.

Another voice of reason and common sense, but the Americans aren't listening.  Let's hope the Europeans come to their senses.  This article showed up on the Russia Today website at 12:13 p.m. Moscow time on their Monday, which was 5:13 a.m. in New York.

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'Macedonia unrest - another episode of West-Russia geopolitical battle'

The anti-governmental protests taking place in Macedonia is a sustained regime change attempt driven and financed by Western countries, Srdja Trifkovic, foreign affairs editor at Chronicles magazine, told RT.

RT: The protesters have vowed to stay on the streets until the government resigns. Will it go this far?

Srdja Trifkovic: It’s a classic regime change scenario as outlined by Gene Sharp many years ago. I don’t think that it will work this time round because first of all we are talking about thousands of protesters, not tens of thousands. In a country like the former Yugoslavian Republic of Macedonia with its 2 million people, tens of thousands might have provided the critical mass needed. I do not believe that Zoran Zaev, the socialist leader, has reason to believe that [Prime Minister] Nikola Gruevski will simply pack up and go. He knows that he is under attack both by the Western powers which have provided materials to be leaked to the opposition, and by the Albanian terrorists and he knows that his .. maneuvering space is extremely limited. So I don’t think that it will end in 24 or 48 hours with yet another president resigning.

This Russia Today article is a must read for all serious students of the New Great Game.  It was posted on their Internet site at 4:11 p.m. Moscow time on their Monday afternoon.  I thank Roy Stephens for bringing it to our attention.

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‘Bigger role’ for U.S. in Minsk II accords: Are you sure, Ms. Nuland?

One year into the Ukrainian crisis, Washington reveals a desire to jump on the bandwagon of the Minsk peace accords – brokered by France and Germany. Not bad news, after all, but when it comes from Victoria Nuland...

News that US Secretary of State John Kerry flew to Sochi to meet with Russian Foreign Minister Lavrov and President Putin came as only a small surprise this week. In the wake of the most impressive Victory Day celebration ever across Russia, most experts agreed that the Russia people’s vigilance held a fairly massive sway over world public opinion afterwards. Western media was not oblivious to this either.

However much of a positive this trend may be, news that the Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland and sidekick Ambassador Geoffrey Pyatt are on the loose again tends to quell hopes of peace.

The U.S.---always sticking its nose in where it's neither wanted, needed---or appreciated.  This Op-Edge piece appeared on the Russia Today website very early Sunday morning Moscow time---and in my opinion it's certainly worth your while.  Once again I thank Roy Stephens for sending it our way.

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Too early to speak of decisions on Ukraine after meeting with Nuland — Russia's deputy FM

It is too early to talk about any decisions on the Ukrainian conflict resolution after the Moscow meeting with US Assistant Secretary for European and Eurasian Affairs Victoria Nuland, Russian Deputy Foreign Minister Grigory Karasin told TASS on Monday.

"We have the Russian president's orders to establish bilateral contacts after the meeting with the [U.S.] state secretary [John Kerry] to discuss certain issues of the Ukrainian crisis resolution," Karasin said. "That's exactly what we are doing."

"We are trying to find those forms of cooperation that would, first of all, prevent a new round of the armed conflict in [Ukraine's] southeast and help launch a real dialogue between the Kiev government and representatives of the DPR and LPR [self-proclaimed Donetsk and Luhansk republics]," he said. "So far, this goal has not been achieved. Kiev is ignoring all the initiatives coming from Donetsk and Luhansk."

This news item, filed from Moscow, was posted on the Internet site at 9:48 p.m. Moscow time on their Monday evening, which was 2:48 p.m. EDT in Washington.  Once again I thank Roy Stephens for sending it along in the wee hours of Tuesday morning.

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Paul Krugman Drops Epic Truth Bomb on Latest Round of Lies About Iraq War

"Mistakes were made" just doesn't get at the truth about how America was coerced into the disastrous war in Iraq,and the horrific consequences that are still unfolding. Paul Krugman sets the record straight in Monday's column, beginning with the ironic statement, that "there’s something to be said for having the brother of a failed president make his own run for the White House."

The Iraq War was no innocent mistake based on faulty intelligence, Krugman argues compellingly. "America invaded Iraq because the Bush administration wanted a war," he writes. "The public justifications for the invasion were nothing but pretexts, and falsified pretexts at that. We were, in a fundamental sense, lied into war."

And we knew it—or certainly should have.

This should be no surprise to anyone.  It's just the same as the Lusitania, Pearl Harbor, Iran, 9/11, Bosnia, Libya, Syria, Ukraine---the list is nearly endless.  This absolute must read article appeared on the Internet site yesterday sometime---and I thank Roy Stephens for sliding it into my in-box yesterday evening Denver time.

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An Eye To Iran: European Businesses Prepare for Life After Sanctions

When Iran's oil minister receives visitors, he wears the usual insignias of the Iranian Revolution: an open shirt with a dark suit, five o'clock shadow and no tie. He holds Tasbih prayer beads in his left hand.

But Bijan Zanganeh is one of the Iranian pragmatists who would like to see a change in relations with the West. His schedule during a visit to Berlin the week before last was accordingly jam-packed with meetings.

He had breakfast with company representatives from Volkswagen and Linde, the world's largest gases and engineering company; held discussions with owners of small- and medium-sized businesses and also showed German Economics Minister Sigmar Gabriel the enormous possibilities that lie in the expansion of the Iranian energy sector.

The Tehran official found attentive listeners. Officials in Gabriel's ministry estimate that Iran has investment needs of around $100 billion per year. The country needs to update aging infrastructures, it needs modern automobiles, heavy machinery and pharmaceuticals -- all segments in which Germany is a global market leader.

This very interesting story was posted on the German website at 3:54 p.m. Europe time on Monday afternoon, which was 9:54 a.m. in Washington.  It's the final contribution of the day from Roy Stephens---and I thank him on your behalf.

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Stung by its neighbour's reaction, India plays it cool after 2nd quake hit Nepal

Stung by Nepal's reaction to India's over-generous assistance in the immediate aftermath of the April 25 earthquake, this time India is playing it slightly cool with its smaller, prickly neighbour.

On Wednesday, Prime Minister Narendra Modi spoke to his counterpart in Nepal Sushil Koirala, a conversation very different from the one that fateful Saturday​ two weeks ago​.

Yesterday's had the air of a ​caring but ​cool neighbour. "PM Sushil Koirala and I had a telephonic conversation. We reviewed the situation arising due to yesterday's tremors." said Modi in a tweet, before going on to promise assistance.

No good deed ever goes unpunished.  This interesting article, filed from New Delhi, put in an appearance on the Times of India website late Thursday morning IST [India Standard Time]---and I thank Kathmandu, Nepal reader Nitin Agrawal---who is still with us after the big quake---for passing it around on Saturday.

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SGE Withdrawals vs. WGC Demand Q1 2015

SGE withdrawals from May 4 until May 8 (week 18) accounted for 37 metric tonnes. As a rule of thumb, this amount of gold is equal to Chinese wholesale gold demand – read this post for a comprehensive analysis of the mechanics of the Chinese gold market and all metrics used to measure demand. Year to date an incredible 858 tonnes has been withdrawn from SGE designated vaults, up 9 % y/y from 2013, up 19 % y/y from 2014.

Just three countries have exported 320 tonnes to China in three months. Chinese gold import added by mine supply (111 tonnes) and a little scrap easily exceeds 460 tonnes. So, 460 tonnes is the minimum of Q1 total supply for China, yet, demand as disclosed by the World Gold Council (WGC) was 273 tonnes; the mystery continues.

From what I’m seeing Chinese gold demand in Q1 was 500-600 tonnes, though the WGC wants us to believe it’s only slightly more than half of this (273 tonnes). The gap, as I’ve previously called it, has mushroomed to over 3,000 tonnes of gold in total since 2009!

This commentary by Koos appeared on the Singapore Internet site on Saturday---and it's definitely worth reading.  I thank Dan Lazicki for pointing it out before Koos let me know.

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'Central banks aren't trading the gold market the way they used to' -- Financial Times

A few years ago London's precious metals traders would arrive at their desks to find the phones flashing. On the other end of the line were rival banks looking to buy and sell gold. Today the trading floors are a lot quieter.

Not only is most trading screen-based but there has been a decline in bank-to-bank activity -- the anchor of the over-the-counter (OTC) billion market -- as many institutions have scaled back or exited commodities.

This has made the gold market more frenetic and pushed up the costs of hedging and doing larger trades, according to market participants.

"If you're just transacting in small sizes then probably you have benefited from the changes as you can transact directly through a bank's electronic platform," says one veteran trader.

"The issue is if you want to transact in a decent size, which used to be 100,000 to 200,000 ounces. That has become harder to get away with without influencing the price unduly."

I would guess that physical gold in size is a pretty scare commodity these days---and I would guess that silver would be the same.  And as Ted Butler pointed out, the COMEX futures market is very illiquid, as most of the trading is for price management purposes between the commercials and the Managed Money. This worthwhile read appeared on the Financial Times website on Monday---and it's posted in the clear in this GATA release.

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Book review: 'The Floating Kilogram' -- the Federalist Papers for a gold standard

A recent article in The Week by progressive columnist Jeff Spross, "How Modern Capitalism Killed Self-Reliance," observed that "the gold standard is a niche enthusiasm rejected by most economists." Why that is so is curious. The hyperlink to his observation goes right to Episode 252 of NPR's "Planet Money," an interview with "charming curmudgeon" James Grant, which first aired in February 2011.

This is the same James Grant who furnished the foreword to Seth Lipsky's delightful new book "The Floating Kilogram ... and Other Editorials on Money from The New York Sun."

"The Floating Kilogram" was described by Steve Forbes: "This brilliant book is The Federalist Papers for a gold standard. It succeeds, dazzlingly -- and convincingly -- making the irrefutable case for re-linking the battered dollar to gold."

This very interesting book review/commentary showed up on the Internet site yesterday morning EDT---and I found it on the Internet site.

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Peru is another rich country insisting on being poor and pockmarked

National Public Radio broadcast and published a long report about the environmental devastation done by wildcat gold miners in Peru, a phenomenon common throughout the part of the developing world that has mineral resources:

What the NPR report missed is that this devastation is to a great extent the consequence of gold price suppression by Western central banks.

Yes, while the extractive industries are the prerequisites of modern civilization, they can damage the environment. Gold mining is only one of those industries. As with all extractive industries, the costs of environmental safeguards and remediation must be built into the price of their products.

When the gold price is suppressed by central banks, corporations -- which government easily can regulate and through which government enforces environmental safeguards and remediation -- won't mine as much of the metal and won't employ as many people. For amid price suppression, the metal can't be mined legally and responsibly; its price won't support responsible practices.

This story appeared on the Internet site very early Sunday morning EDT---and it's actual headline reads "Who Did This to Peru's Jungle?"  The one shown above is from Chris Powell---and it's a gold related story that was posted in a GATA release.

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To central bankers, these deaths are just collateral damage of currency market rigging

Peter Kollie was digging for gold in the forests of southeastern Liberia when the deep shaft he had carved out of the earth collapsed, turning into a dark, airless tomb.

But that was a risk the 20-year-old, like thousands of desperate and impoverished young men working the illegal gold-mining camps of the border region by Ivory Coast, had been prepared to take.

"In such cases there is nothing we can do. We leave the body there and abandon the area for a while," Lomax Saydee, a fellow miner and youth welfare volunteer, told AFP a few days after Kollie's death. "After a certain period of time we go back and re-open the place and generally in that case you discover a huge quantity of gold in the area where the person died underground.

"So it is like you are digging your own grave sometimes, because if it closes on you no one can help you."

The actual headline to this AFP story reads "Buried Alive: Young Liberians Risk All in Deadly Mines".  It was picked up by the Internet site at early Sunday afternoon EDT---and it's another unhappy gold-related story that I found on the Internet site.

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Open-Pit Gold Mine Collapse in Guyana Traps 10 Miners

An open-pit gold mine in remote southern Guyana has collapsed and buried up to 10 miners in debris.

Police spokesman Ivelaw Whittaker says authorities are digging through the mud in an attempt to rescue the men but it appears unlikely any survived. Seven miners were injured and treated at a hospital in the nearest town.

The collapse occurred Sunday in the densely forested Potaro-Siparuni region near the border with Brazil. The region has many informal, open-pit gold mines run by small operators.

Miners Association President Patrick Harding said recent heavy rains have made the work especially treacherous. He said his organization has been working to persuade operators to provide adequate support for the mud walls but said many disregard those precautions.

This AP story, filed from Georgetown, Guyana, was picked up ABC News on Monday---and it's another story that showed up in a GATA release.

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Platinum supply still in deficit but not as large – WPIC

The latest Q1 analysis of global platinum supply and demand from the World Platinum Investment Council (WPIC) suggests a much lower supply deficit this year than the recent GFMS analysis but unlike the GFMS report, perhaps advisedly, makes no forecasts on what the effects on pricing might be as there are factors other than supply/demand fundamentals at play here.

Data for the WPIC survey is provided by commodities analysts from SFA (Oxford) and there certainly are some broad disparities from the GFMS Q1 report. GFMS puts the overall supply deficit this year as being in the order of 670,000 ounces, down from 1.016 million ounces in 2014. The WPIC report suggests a 190,000 ounce deficit this year, down from a 670,000 ounce deficit last – a considerable difference between the two analyses. GFMS also suggests the platinum market could move into surplus in 2016, and while the WPIC makes no such projections of the likely position a year hence, the implications of its latest analysis certainly suggests at least a more balanced supply/demand outlook ahead.

And, to his credit, Lawrie points out the obvious---"But platinum is also classified as a precious metal and as such the price may move broadly in tandem with gold despite it having no real monetary element in its demand. Further, its price fate is seen by many, like gold, as being in the hands of COMEX speculators rather than in terms of supply/demand fundamentals."

Amen to that!  Except the 'speculators'---according to the latest Bank Participation Report---are '3 or less' U.S. banks.  This commentary appeared on the Internet site at 2:05 p.m. BST in London on Monday.  It's definitely worth reading if you have the interest.

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Perth Mint Gold Bullion sales up 13.5% Y/Y in April

Australia's Perth Mint has sold 26,545 ounces of gold coins and bars during April, advanced 13.5% from the sale of 23,461 ounces a year earlier, latest figures from the Perth Mint showed.

Although, sale of gold coins and bars down 22.5% as compared to the sale of 34,260 ounces a month earlier.

Perth Mint's sales of silver coins recorded at 472,273 ounces in April, tumbled 26% from the prior month’s total of 638,557 ounces but they marked a 30.5% increase from 361,988 ounces sold in April of last year.

Year-to-date, the Mint’s silver sales totalled 2,088,897 ounces, declined 5.6% as compared to 2,211,629 ounces in the corresponding period last year.

The above four paragraphs are all there is to this brief news item that appeared on the Internet site at 10 a.m. IST on their Saturday morning.  I found it on the Sharps Pixley website yesterday.

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Why Most Gold Bugs Are Dead Wrong -- Jim Rickards

One of the most persistent story lines among gold bugs and market participants who foresee the collapse of the dollar goes something like this:

China and many emerging markets including the other BRICS are looking for a way out of the global fiat currency system.

That system is dominated today by the U.S. dollar. This dollar dominance allows the U.S. to force certain kinds of behavior in foreign policy and energy markets.

Countries that don’t comply with U.S. wishes find themselves frozen out of global payment systems and find their banks unable to transact in dollars for needed imports or to get paid for their exports. Russia, Iran, and Syria have all been subjected to this treatment recently.

China does not like this system any more than Russia or Iran but is unwilling to confront the U.S. head-on.

This must read essay put in an appearance on the Internet site on Saturday---and the first reader through the door with it was Harold Jacobsen.

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